Diamondback Energy Issues $1.2 Billion in Senior Notes

Diamondback Energy, Inc. (NASDAQ:FANG), a player in the crude petroleum and natural gas industry with a market capitalization of $46 billion, has finalized the issuance of $1.2 billion in senior notes, as reported today. These 5.550% Senior Notes, maturing in 2035, were offered as part of a public offering concluded on Thursday. According to InvestingPro data, the company currently trades below its Fair Value, maintaining a healthy dividend yield of 4.13% with an 8-year track record of consistent dividend payments.

The offering was conducted under an effective Shelf Registration Statement filed with the Securities and Exchange Commission (SEC) on November 21, 2022. Details of the notes were outlined in a prospectus supplement dated March 6, 2025, and filed with the SEC on March 10, 2025.

These senior unsecured obligations are on par with Diamondback’s and its subsidiary Diamondback E&P LLC’s existing and future senior indebtedness. This includes the company’s outstanding senior notes, guarantees thereof, and obligations under its revolving credit facility, among other financial instruments.

Diamondback has the option to redeem the notes in whole or in part before January 1, 2035, at a calculated redemption price. Post the Par Call Date, the company may redeem the notes at 100% of their principal amount plus any accrued and unpaid interest.

The indenture governing the notes includes customary covenants that, among other things, limit the company’s ability to incur liens securing funded debt and to engage in certain types of mergers, consolidations, or asset sales.

This financial move could potentially affect Diamondback’s strategic flexibility and capital structure. The notes offering and its terms are detailed in the Base Indenture and the Third Supplemental Indenture, which are filed as exhibits to this SEC filing and are integral to understanding the full scope of the agreement.

In connection with the closing of the notes offering, Diamondback has also filed a legal opinion regarding the legality of the notes, which is included in the filing to be incorporated by reference into the Shelf Registration Statement.

The information disclosed is based on a press release statement and aims to present the facts of Diamondback Energy’s recent financial activity to investors and interested parties without any endorsement or promotional commentary. With robust EBITDA of $7.73 billion, the company demonstrates significant operational strength. For deeper insights into Diamondback Energy’s financial health and comprehensive analysis, investors can access detailed Pro Research Reports available on InvestingPro, which offers expert analysis and actionable intelligence for over 1,400 US stocks.

In other recent news, Diamondback Energy has been the focus of several analysts’ updates and financial maneuvers. The company announced the pricing of a $1.2 billion senior notes offering at an interest rate of 5.550%, maturing in 2035, with proceeds intended for general corporate purposes, including the acquisition of subsidiaries from Double Eagle IV Midco, LLC. Benchmark analyst Subash Chandra reaffirmed a Buy rating with a $195 price target, projecting first-quarter earnings per share (EPS) of $3.93 and earnings before interest, taxes, depreciation, and amortization (EBITDA) of $2.6 billion, aligning with market expectations.

Meanwhile, Raymond (NSE:RYMD) James adjusted its price target for Diamondback Energy to $214 from $245, maintaining a Strong Buy rating. This adjustment followed a review of the company’s recent earnings, which surpassed expectations, and a decline in oil prices. JPMorgan also revised its outlook, increasing the price target to $212 and maintaining an Overweight rating, based on updated EPS and cash flow per share estimates for 2025 and 2026.

UBS maintained a Buy rating with a price target of $216, praising Diamondback’s fourth-quarter 2024 results and noting lower-than-anticipated cash unit costs. The analysts highlighted the company’s ability to derive value from mergers and acquisitions and its expansion in the Midland region. These developments underscore Diamondback Energy’s strategic positioning and financial performance in the current market landscape.

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